Mr B Cunningham v Sainsbury’s Supermarkets Ltd: 3312531/2021
EMPLOYMENT TRIBUNALS
Case No 3312531/2021
Between
Mr B CunninghamClaimantSainsbury’s Supermarkets LtdRespondent
Before
Employment Judge S MatthewsMr Cunningham (father (instructed by Claimant)) for claimantMr Liberadski (instructed by Counsel) for respondentDate 26 April 2022
JUDGMENT
[1]The respondent made unauthorised deductions from wages by failing to pay the claimant the full amount of overtime wages due from 1 November 2019 to 7 February 2021 and is ordered to pay to the claimant the sum of £1870.08 being the total gross sum deducted.
REASONS
Introduction
[1]The claimant claimed unauthorised deduction of wages and breach of contract for failure to pay him the full wages to which he alleged he was entitled for overtime carried out between 1 November 2019 and 7 February 2021.[2]The issue for the tribunal to decide was whether the respondent made unauthorised deductions contrary to s.13 of the Employment Rights Act 1996.[3]The tribunal needs to decide whether the overtime pay was properly payable. The respondent’s case is that the overtime worked was not agreed in advance and therefore was not properly payable.[4]It was agreed that the amount of overtime payment due to the claimant if it had been properly payable was £1870.08.[5]The respondent’s assertion in the Response that the tribunal does not have jurisdiction because the claim for unauthorised deduction of wages was made after the expiry of the three month time limit was withdrawn. Procedure, Documents and Evidence Heard[6]I heard evidence from the claimant (who attended by CVP as he had recently tested positive for Covid) and from managers on behalf of the respondent, Martin Bell, Karen Foggo and Daniel Stillwell. Their statements were accepted as evidence in chief. There was an electronic bundle of 246 pages. References in brackets below are to numbers in the bundle. Fact Findings[7]I made the following findings of fact. Where there was a conflict of evidence I resolved it, on the balance of probabilities, to arrive at the findings of fact set out here. Overtime worked[8]The claimant worked for the respondent at its Calcot store in Reading as a general assistant/driver from 31 October 2019 to 4 June 2021. His role included delivering groceries to customers and loading delivery vans.[9]In the period leading up to Christmas 2019 the demand for online deliveries increased. From February 2020 the Covid pandemic led to a significant further increase in demand for delivery services. As a consequence, the claimant (who usually arrived early for work) began to be asked by his onduty managers if he could start his shift early and stay late.[10]The claimant started to work many hours a week over his basic contracted hours of 30.67 (these contracted hours were increased to 45 hours in May 2020).[11]The claimant explained in evidence how overtime was not usually planned in advance of each day in his department. The overtime was undertaken by arriving early or staying late on his shift in response to immediate demand. He was not asked to work extra days as he was already working six days a week.[12]The claimant’s total overtime amounted to over 667 hours in the period to which the claim relates. He was paid for 465 hours, initially leaving 202 hours unpaid. Sixteen of these hours were paid prior to his resignation, leaving 186.3 unpaid. This calculation is accepted by respondent. Contractual entitlement to pay for overtime[13]The claimant’s terms and conditions of employment (58) state that an employee will be able to apply for overtime. The policy ‘Rates premiums and allowances’ (48) (the Policy) provides that all overtime is paid at the single rate and ‘is to be agreed in advance by line managers’. The Policy specifically deals with the situation where an employee clocks in early or clocks out late, stating that any extra time ‘will be paid to the minute but needs to be agreed with a manager’ (49). It gives the example of an employee clocking out late if they are helping a customer stating that ‘they need to inform their manager’.[14]Martin Bell (MB), Operations Manager, stated in evidence that an employee who is clocked in is not necessarily working. He said that in his experience employees clock in without authority on their way through to the canteen and wait there until they start work. I find that this did not apply to the claimant. I accepted the claimant’s evidence that he asked on each occasion if he was required to start work before clocking in and he informed a manager on each occasion when he did not clock out on time. MB did not manage the claimant, although he worked in the same store. I do not consider that his impression about some of the employees in the claimant’s department outweighed the claimant’s evidence that he was diligent about ensuring he had agreement to start work early and finish late.
Conclusion
[15]The claimant gave evidence that his requests to start work early or leave late were never refused. There was always a store manager on duty as it was a very busy department. He had seven or eight managers. He would make his way into work early and would have a discussion with the line manager about whether he could start work. It was never refused; if it had been he would have had a coffee in the canteen first. When he was out in the delivery van he had a handset to make contact with the manager on duty. He can also remember using own mobile phone on occasions where that failed to work.[16]I find that it was the expectation of the claimant that he would be paid for the overtime hours he was working by arriving early or staying late. When asking if he could come in early or stay late he was not offering to do the work unpaid. By agreeing the manager was implying that he agreed to the overtime being paid. This is consistent with the example given in the Policy (49). Monitoring of employee working time[17]The respondent uses a software system called Kronos. This records the clock in and clock out times of employees. The basic contractual hours are recorded as scheduled hours and set about 3 weeks in advance on the basis of an availability schedule completed by the employee. Kronos highlights when employees have worked times outside the scheduled hours with a red clock. A line manager logs onto the system and is required to click on the red clock. If the time has been agreed as overtime the line manager approves it on Kronos and the employee is paid overtime. If it has not been agreed the line manager is required to select a comment stating that it is unauthorised and the employee is not paid (208).[18]The claimant was unaware that the managers needed to complete this process on Kronos before his overtime was approved and assumed that all the time he had agreed outside his scheduled hours would be paid as overtime. He did not keep his own record of the overtime he had agreed with his line managers.[19]MB explained in evidence that it would not necessarily be the manager who agreed to an employee starting early or staying late who confirmed the authorisation on Kronos. The authorisation was not entered at the time the overtime was agreed. It was good practice to authorise it on Kronos the following day, although sometimes it was not recorded until days later. The claimant had seven or eight different managers who had the authority to agree overtime and who could record agreement on Kronos. There was no prescribed way of keeping a contemporaneous record of overtime agreed. MB said he might make a handwritten note or put it in his phone. However, he did not know how the practice worked in the claimant’s department, only in his own department. If the manager reviewing the time on Kronos did not know whether overtime had been agreed by another manager MB would expect them to send an email to the manager who had been on duty to check. Karen Foggo (KF), manager of Broad Street, Reading said it could be verbal or handwritten in a diary, but it was ‘down to communication’ and she could not comment on the practice in the Calcot store, only in her own store.[20]I prefer the claimant’s evidence that the overtime was agreed as none of the respondent’s witnesses could give evidence of the practice of communicating agreement in the claimant’s department. I find it likely that a system where a different manager to the one who agreed overtime completed authorisation on Kronos and where there was no consistent system of recording or communication between managers is likely to give rise to errors or inconsistency in the recording. Respondent’s investigation[21]In January 2021 the claimant noticed for the first time that his pay was lower than he expected on the basis of the overtime he could recall working over the busy Christmas period. He examined the Kronos data available to him and noted that the hours marked as unscheduled going back to November 2019 had been unpaid.[22]He raised the matter informally with his line manager Faye Brooker (FB) and MB. It was agreed to pay him sixteen hours from the most recent period but not for the time from previous months. This led to him raising a formal grievance using the respondent’s procedure named ‘Fair Treatment Concern’ (FTC). The first FTC meeting was held with KF and the FTC appeal was heard by Daniel Stillwell (DS), manager of the Winnersh store.[23]Their investigations concluded that there was no evidence that the unscheduled hours had been agreed by the line managers. The evidence given to the investigation by the line managers is set out below.[24]KF spoke to two of the claimant’s line managers (Dylan Stevens and Adam Weatherly) who stated that the claimant had done agreed overtime which they believed he had been paid for.[25]Monika Prus sent an email to DS, stating that she had asked the claimant to stay late on occasions for which he had been paid but denying that she ever asked him to come in early (150).[26]Ira Steele (IS) sent an email to MB on 6 March 2021 (147/148) in which he said that he had spoken to the claimant in September 2020 and told him that he was concerned that he was working outside his contractual hours and he made it ‘explicitly clear’ that he would not be paid for working overtime that was not requested by a manager. He said he was satisfied that the claimant understood that he was not going to be paid for hours that he decided that he would do additionally and he told the line managers not to ask the claimant to ‘stay on’ over his 45 hour contract.[27]The claimant denied that the conversation with IS took place both at the initial investigation hearings and in evidence to the tribunal. I prefer the claimant’s evidence on this to the evidence in the email from IS. The alleged conversation was not documented or followed up in writing. IS stated the claimant knew that he was working for free and that the overtime was voluntary. I find it implausible the claimant would have continued to work extra hours if he knew he was not going to be paid. As soon as the claimant realised he was not being paid he raised the matter culminating in the FTC and ceased working overtime. IS said that he told line managers not to give the claimant any more overtime but this is undermined by the fact that the claimant did continue to work and be paid overtime.[28]Three other managers were not interviewed for the investigation. None of the line managers gave evidence to the tribunal.[29]The investigation accepted the line managers’ explanation and the data on Kronos. The managers were not questioned about the Kronos system and there was no evidence before the tribunal that the investigation had considered whether there had been a failure to authorise overtime that had in fact been agreed by another manager. It did not ask managers how they communicated with each other when overtime was agreed to ensure that it was correctly credited on Kronos. A time sheet was obtained for the period from January to July 2020 (64-70) but the names of those who had declined to approve the overtime were redacted and those managers do not appear to have been questioned about their recollection of their reasons for refusing the overtime. Their evidence was not before the tribunal.[30]The respondent’s decision was influenced by the fact that the claimant was not able to give specific examples of which managers had agreed overtime and then failed to approve it on the system. I find that it was not surprising that the claimant could not point to specific examples as agreement to overtime was always given and the period in question went back over many months.[31]There was also a misunderstanding in the investigation where the claimant had told MB that he remembered once staying late and not expecting to get paid. MB thought this was evidence that he did expect to get paid for time that had not been agreed. This was corrected by the claimant in subsequent meetings (87,121) and in evidence to the tribunal. It was an example which the claimant had offered in order to show that he fully understood that he needed to get authorisation if he was to be to be paid. He remembered the incident because it was so unusual in that he made a conscious decision to stay late and was the only one in the department and did not obtain agreement beforehand.[32]I found the claimant an honest and credible witness. The reason for this is that he was consistent throughout the investigation meetings and when giving evidence. I preferred his evidence to that of the respondent’s witnesses. There was no evidence before the tribunal on the practices of the claimant’s department and none of his line managers who were directly responsible for agreeing or refusing the overtime gave evidence.[33]In summary I find that the claimant did get agreement for all the hours he was clocked in but that this was not correctly recorded on the Kronos system. This was because it was not done contemporaneously and often a different manager would review the hours on Kronos. The claimant’s department was a busy one with seven or eight managers and there was no set system or policy for them to communicate with each other when overtime was agreed. Law[34]Section 13(1) of the Employment Rights Act 1996 provides that an employer shall not make a deduction from wages unless the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract or the worker has previously signified in writing his agreement or consent to the making of the deduction.[35]Section 13(3) provides that where the total amount of wages paid on any occasion by an employer is less than the total amount of the wages properly payable to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion.[36]The question of what is properly payable requires interpretation of the relevant terms of the contract and a factual analysis of the claim.[37]Counsel for the respondent referred me to the case of Blair v Hotel Solutions Limited UKEAT/0412/11/DM. In that case the Employment Appeal Tribunal upheld the tribunal’s decision that the overtime worked was entirely voluntary. Conclusion Contractual entitlement[38]The starting point is the terms of the contract. The terms and conditions provide that an employee can ‘apply for overtime’. The Policy provides that overtime will be ‘paid as long as it is agreed in advance.’ The Policy gives the example of staying late and specifies that a manager is to be informed. It is clear that if an employee is staying late and informs their manager they will be paid overtime. This is what is meant by ‘agreed in advance’. This can be distinguished from Blair v Hotel Solutions Limited where there was no such clause and it was merely stated that overtime was voluntary. In contrast to this respondent’s terms and conditions provided that overtime was payable as long as it was agreed in the manner described above. Factual dispute[39]It is not disputed that the claimant was clocked in for the hours for which the overtime is claimed. The dispute is whether he had obtained agreement in advance to work those hours. That is a matter of fact. I have found that he did expressly obtain agreement as I accept his evidence that he always obtained agreement before clocking in early and before clocking out late. The terms and conditions and the Policy make it clear that agreement was required in advance and the claimant was aware of this and obtained agreement. His line managers failed to record the agreed overtime correctly on Kronos. Costs[40]The claimant has indicated that he will be applying for a Time Preparation Order (TPO) under Rule 77 of the Employment Tribunal Procedure Rules.[41]Rule 76 provides as follows: “A tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that – a) A party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted or b) any claim or response had no reasonable prospect of success….”[42]If the claimant intends to pursue an application for a TPO he is to confirm in writing to the tribunal and the respondent within 28 days after the date this Judgment was sent to the parties and include:42.1 a breakdown of time spent in bringing the proceedings up to the date of the hearing;42.2 written representations setting out why he alleges the respondent’s conduct entitles him to a TPO and/or the response had no reasonable prospect of success;[43]The respondent is to respond within 28 days of receiving the claimant’s written representations with written representations setting out why the respondent does not agree to a TPO.[44]A determination will be made on the basis of the written representations by the Employment Judge under rule 60 of the Employment Tribunal Procedure Rules.[1]The claimant claimed unauthorised deduction of wages and breach of contract for failure to pay him for overtime worked between 1 November 2019 and 7 February 2021. The Full Merits Hearing (FMH) took place on 25 April 2022.[2]By a reserved Judgment sent to the parties on 16 May 2022 the tribunal decided that the respondent made unauthorised deductions contrary to s.13 of the Employment Rights Act 1996 and ordered the respondent to pay to the claimant the sum of £1870.08.[3]The claimant applies for a Time Preparation Order (TPO) under Rule 77 of the Employment Tribunal Procedure Rules. The parties have been informed that a determination will be made based on written representations under rule 60 of the Employment Tribunal Procedure Rules. Procedure[4]The claimant was directed to prepare4.1 a breakdown of time spent in bringing the proceedings up to the date of the hearing;4.2 written representations setting out why he alleges the respondent’s conduct entitles him to a TPO and/or the response had no reasonable prospect of success;[5]The respondent was directed to respond within 28 days of receiving the claimant’s written representations with written representations setting out why the respondent does not agree that a TPO should be granted.[6]The tribunal has received the claimant’s representations consisting of 4 pages (undated), the objections of the respondent dated 8 June 2022, the claimant’s response to the objections dated 13 June 2022 and a further response from the respondent also dated 13 June 2022. The claimant’s representations dated 13 June 2022 attached copies of without prejudice correspondence dated from September 2021 to February 2022.[7]I have also considered the claimant’s letter dated 29 November 2021 when the claimant notified the respondent that he would be applying for a TPO. It states, ‘The time will be particularly related to research into the Respondent's policies and IT systems, my rights as the claimant and the Employment Tribunal Procedures. The preparation time will also include detailed data analysis of the Respondent’s timecard and pay systems, correspondence with the Respondent, preparation of case notes, witness statement, cross examination notes and preparation of the bundles.’ Law[8]Rule 76 (1) provides as follows: “A tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that – a) A party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted or b) any claim or response had no reasonable prospect of success….”[9]Rule 76(1) (a) refers to conduct ‘in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted’. In Health Development Agency v Parish 2004 IRLR 550, EAT, it was held that conduct prior to the issue of proceedings cannot be considered. The tribunal has no power to make an award of costs incurred prior to the commencement of proceedings.[10]Rule 75(2) provides that the award of a TPO is for time spent working on the case prior to the final hearing. “A preparation time order is an order that a party (“the paying party”) make a payment to another party (“the receiving party”) in respect of the receiving party's preparation time while not legally represented. “Preparation time” means time spent by the receiving party (including by any employees or advisers) in working on the case, except for time spent at any final hearing.” The ground that a response did not have reasonable prospects of success is to be subjected to analysis as set out in Opalkova v Acquire Care Ltd EAT 0056/21: ‘First, objectively analysed when the response was submitted did it have no reasonable prospects of success; or alternatively at some later stage as more evidence became available was a stage reached at which the response ceased to have reasonable prospects of success? Second, at the stage that the response had no reasonable prospects of success did the respondent know that was the case? Third, if not, should the respondent have known that the response had no reasonable prospect of success? ‘[12]The consideration of whether to award a TPO is a two-stage process. First it is necessary to decide if there has been conduct as set out in Rule 76 (1)( a) or if the claim had no reasonable prospect of success as set out under Rule 76(1)(b). If either of those two tests are met it is then necessary to decide if it is appropriate to make an order. Claimant’s submissions[13]These are detailed in a 4-page document. They relate to the conduct of the respondent before the issue of the claim, the failure of the respondent to bring specific witnesses to the FMH and the assertion of the respondent that the claim was outside the time limit. Respondent’s submissions[14]The respondent submits that the conduct of the respondent before proceedings are issued is not relevant to the application for a TPO and the failure to call witnesses is a matter of evidence. It is further argued that the conduct of the claimant was not reasonable as an offer to settle was rejected. In respect of rule 76(1) (b) it is submitted that the test for no reasonable prospects of success has not been satisfied.
Conclusion
[15]I divide my conclusion into 1) conduct and 2) no reasonable prospects of success, accepting the claimant’s assertion in his letter dated 13 June 2022 that the matters raised can be relevant to both. Conduct[16]Considering the wording in rule 76 (1) (a) which refers to ‘the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted’ I find that most of the conduct claimed does not relate to the proceedings for the purposes of the rule. Therefore, I do not take it into account in deciding whether to grant a TPO. Section 5 to 8 of the claimant’s submissions relate to the conduct of the respondent prior to the bringing of proceedings. The claimant’s letter of 29 November 2021 refers to research into the respondent's policies and IT systems and detailed data analysis of the respondent’s timecard and pay systems, which would have been carried out for the purposes of the grievance procedure.[17]The conduct alleged since the bringing of proceedings consists of the respondent’s assertion that the claim was outside the 3 month time limit and the failure to call certain witnesses to give evidence to the tribunal. I find that the claim that the ET1 was issued late was not the main element of the response as alleged by the claimant (4 page document). It was not referred to in the without prejudice letter of 18 November 2021. Nevertheless, the fact that it was not conceded until the morning of the hearing is worthy of consideration under both conduct and reasonable prospects of success. The failure to call witnesses to the hearing relates to the conduct of proceedings. I need to consider whether the respondent acted vexatiously, abusively, or disruptively in these respects.[18]I find that the respondent did not act vexatiously. There is no evidence of spite, some other improper motive or harassment in respect of either the time or the witness issue. The respondent was entitled to take the point on time as discussed below and made an offer to settle without reference to the point. The respondent was entitled to decide what witnesses to call to argue its case. It was for the respondent to present its response as it saw fit. It was open to the claimant to apply for a witness order if the claimant thought other witnesses were relevant to his case. The respondent did not act abusively or disruptively in the conduct of proceedings. The respondent complied with the directions of the tribunal, and, although I found that they were mistaken about whether the overtime had been authorised, I did not find that there had been lies and false evidence. I find that the respondent’s representatives conducted the proceedings professionally and in a timely manner. They made an offer to settle of an amount which was slightly more than the claimant recovered. No reasonable prospect of success[19]In considering whether the response had no reasonable prospect of success I have considered the prospects of success of the response objectively. I have further considered if the respondent maintained a response that it knew was unmeritorious or untrue. I find that this was not the case at any stage in the proceedings. This was a factual dispute and the respondent, having conducted their own investigation, believed its own managers and the Kronos system rather than the claimant. This was not an unreasonable belief when viewed objectively. The defence that the claim was issued outside the 3 month period was not unreasonable. It turned on whether time ran from the date the pay was earned rather than the date on the claimant’s pay slip.[20]As I do not find that Rule 76(1) (a) or (b) is satisfied I do not need to go on to consider exercising my discretion. The claimant’s claim for a TPO is refused.